THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

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[11:00:00]

ANA CABRERA, CNN ANCHOR: Hello. I'm Ana Cabrera on this Friday. We begin with breaking news. A pivotal day in a young presidency. A pivotal meeting happening right now between two of the world's most powerful leaders, and it's a pivotal moment for U.S.-Russian relations.

President Donald Trump and Russian President Vladimir Putin holding their first official talks at the G20 Summit in Hamburg, Germany. Former CEO meets former KGB. Novice statesman meets savvy politician. Here is what President Trump said just before the doors closed for the camera.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES OF AMERICA: Thank you very much. We appreciate it. President Putin and I have been discussing various things. I think it's going very well. We have had some very, very good talks. We are going to have a talk now and obviously, that will continue. We look forward to a lot of positive things happening for Russia, for the United States and for everybody concerned. It's an honor to be with you.

VLADIMIR PUTIN, RUSSIAN PRESIDENT: Thank you.

PRESIDENT TRUMP: Thank you.

(END VIDEO CLIP)

CABRERA: Today's meeting of the proverbial eagle and the bear also has an elephant in the room. Russian meddling in the U.S. election, it's the topic, the White House said President Trump probably won't bring up. It's a topic (inaudible) said he must address.

CNN White House correspondent, Sara Murray is joining us live in Hamburg. So Sara, I'm looking at going on 50 minutes of which was supposed to be just a 30-minute meeting. Are they still having this meeting right now?

SARA MURRAY, CNN WHITE HOUSE CORRESPONDENT: Well, we are waiting on word from White House officials into whether this meeting is still going on. Obviously, once it concludes, we expect to get more information about what topics actually did come up. It wasn't slated to be a particularly long meeting.

And obviously as you saw in the early parts the press was allowed into, President Trump is speaking in English. Russian President Vladimir Putin speaking in Russian. That's how this meeting is going to go. There are two translators in the room to improve the sort of back and forth there.

And then one senior diplomat on each side, Russian Foreign Minister Sergey Lavrov and Secretary of State Rex Tillerson. So depending on how long this goes, they may not have that much time to cover a lot of terrain.

Everyone is, of course, wondering whether Russian meddling is going to come up, whether President Trump is going to raise that and sort of draw a line and take a firm stance with President Putin.

But there are other issues that these two world leaders have to talk about, the aggression from North Korea and how they deal with that. White House officials have also made clear to President Trump was planning on bringing up Russia's role to conflicts in Ukraine and Syria.

So there are a number of thorny diplomatic issues on the table. But what we are heard from President Trump when he was a candidate and when he got into the White House, what he wants to try build on this relationship with Putin. He wants to try to improve the relationship between the U.S. and Russia.

And to that effect, I don't think we should be surprised to see that the first images, the first greeting there was pretty cordial. The president has made no secret of the fact that he wants to improve upon this relationship.

CABRERA: They both used the word positive as they prepare to have their behind closed door talks. All right, Sara Murray, we'll come back to you as soon as we have a wrap on the meeting itself outside the G20.

Meantime, protests have gotten so intense, Melania Trump, the first lady did not even leave her hotel. Her spokeswoman saying the first lady had to miss events with other G20 spouses.

I want to get right out to CNN's Fred Pleitgen who is among the protesters. Fred, fill us in on what's going on right now.

FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Hi, Ana. We are actually right in the middle of a melee right now. As you can see the police -- I'm going to take you over here. Moving in here with those water cannon trucks. There were big scuffles a couple moments ago.

Now you can still see how the cops are getting pelted with bottles. Sorry, we had to run a little bit. They are using water cannons to get those guys back there, away from that little ledge over there.

So the police have just cleared an area over here. What we have had over the course of the day is there's been little pinpoint attacks going on by some of the ultra-left wing protesters, some cars were set on fire earlier this morning at around 8:00 a.m. local time.

If we get here in the middle of the street, you can see the police are using the water cannon trucks to clear that area. One of the reasons is because the protesters aren't supposed to be in this area. They are not mandated to be here.

It's sort of an ad hoc demonstration moving into this area. Obviously, at some point, things kicked off. Someone threw the first bottle and the police started retaliating. It's been basically the story the past 30 minutes or so -- Ana.

[11:05:12]CABRERA: And we can hear you are out of breath. We know you are having to dodge and weave and cover the ground. Stay safe, Fred and keep us updated on the developments. We appreciate your time.

Joining us now to discuss this ongoing meeting between President Trump and President Putin, as well as some of the dynamics on the ground in play as they meet, is CNN counterterrorism analyst and former CIA and FBI official, Phil Mud.

Also with us former CNN Moscow bureau chief, Jill Dougherty, and CNN presidential historian, Douglas Brinkley, and CNN national security and legal analyst, Susan Hennessey. She used to work at the National Security Agency.

Everyone, as we await the readout on this meeting between President Trump and Putin, let's take a look at that little interaction we saw and what we heard from the two men just before their meeting. Watch.

(BEGIN VIDEO CLIP)

PRESIDENT TRUMP: It's an honor to be with you.

PUTIN: Thank you.

PRESIDENT TRUMP: Thank you.

PUTIN (through translator): spoken on the phone with you several times on very important bilateral and international issues, but phone conversations are never enough.

(END VIDEO CLIP)

CABRERA: So Phil Mudd, to you first, what stands out to you about that first face-to-face interaction, their comments, and the body language we saw?

PHILIP MUDD, CNN COUNTERTERRORISM ANALYST: It seems calm so far. Let's remember, the president set the table just earlier this week when he called out the Russians on both Syria and Ukraine. I don't think that's an indication he's going to go tough on Putin.

I think he was trying, in part, to take that issue off the table. To tell critics in America, look, I have raised it. The Russians know we are concerned. Now as you see on, he goes into this meeting, very calm, cool, it's going to be positive.

We are going to shake hands. So he's already indicated he's not going to be a pushover. I think when they get into the meeting, the tone that is set there is going to be fairly cooperative, particularly on this question of whether we can find a way out of Syria, maybe starting with safe havens for civilians.

CABRERA: Jill, we are still waiting to hear whether they are still meeting. If they are, it's close to an hour pretty soon here. In the past, we know Putin has made his counter parts wait for their meetings.

In some cases, when he first met with the German chancellor, Angela Merkel, with the pope, it was 45, 50 minutes, even President Barack Obama, it was around 40 minutes. This meeting seemed to start promptly, what do you think this means?

DOUGHERTY: President Putin I think does things for a reason. So, he was there right on time. In fact, I think it was reporting early. There's a reason that he did that. I think, at this particular point, both sides want this to go very well.

I mean, note, again, not to get too much into the body language, but they look informal, leaning forward, the respect, the happiness that they are meeting. Don't forget, they are beginning from almost ground zero on their relationship. This relationship is very, very bad.

So, certainly for President Putin, if he gets a couple things across, number one, having the meeting. Number two, the respect is an important thing that Putin would love to hear and he got it.

And then also, President Putin saying we are going to deal with bilateral issues but also international issues. You can read into that, that Russia has a role on the world stage to play. He is the man who will do it.

I think they wanted to come out. I don't see that with President Trump, who is kind of new to this game, obviously, and would not, at least I think his advisers would not want him to get into the nitty- gritty of all of these details, beginning the conversation, beginning the dialogue is probably what both sides want more than anything.

CABRERA: There's so much anticipation about the content of their discussion. So far, the only words we have heard from them were remarks like Trump saying, it's an honor to be with Putin. Putin saying I'm delighted to be able to meet you personally. Susan, is that establishing some mutual respect or how do those words as you see it set the stage for how they interact in their meeting?

SUSAN HENNESSEY, CNN NATIONAL SECURITY AND LEGAL ANALYST: So we know that one of the most important things to President Trump is sort of personal respect. You know, stroking his ego a little bit. We saw the Saudis do that rather well in his visit a few weeks ago.

One of the most notable thing about the meeting is not what we are seeing, but what we are not seeing. That's the inclusion of National Security Adviser H.R. McMaster or Senior Russia Director Fiona Hill. So that's relatively troubling.

[11:10:00]There's been reports that White House staff had pushed for those individuals to be in the meeting, people who are Putin skeptics, seasoned and experienced in this area. So sort of that preliminary decision to have a small meeting to only include Tillerson.

That really does open up the ground about what might be discussed and frankly does increases the risk, but it might go off script in a way that's not advantageous to President Trump or to the United States.

CABRERA: And why do you see it that way?

HENNESSEY: Only because as Jill and others mentioned earlier, Putin is 17 years into his presidency, Donald Trump is six months into his. We know he's a very shrewd adept sort of negotiator. He has been very good in the past, even with for more seasoned U.S. presidents.

So I think the push to include as many sort of adults in the room as possible, as much experience as possible was a hope to bolster President Trump and to ensure that he wasn't essentially tricked into agreeing to something without understanding the ultimate ramifications.

CABRERA: I want to put up again the pictures of the four people in the room who are expected to participate in this meeting, again, on the U.S. side, it's President Trump and his Secretary of State Rex Tillerson, and then on the Russian side, it's Vladimir Putin and his -- Secretary Tillerson's counterpart, the foreign minister, Sergey Lavrov.

Douglas, is it unusual just to have such a small group? Does it make this meeting more intimate?

DOUGLAS BRINKLEY, CNN PRESIDENTIAL HISTORIAN: Well, look, it's just a meet and greet here today. I mean, it is a big moment. In 2016, all we did was talk about Putin. One thing that's gotten cleared up already is that Donald Trump had never met Putin before. Putin told us that.

And so Donald Trump thinks in the terms of brands like himself. The whole world, the meeting Vladimir Putin is a big deal for Trump. But, I think what's going to happen out of this is going to be a continuation of meetings. They are going to maybe touch on Syria, North Korea, you know, defeating global terrorism, the Ukraine, perhaps. But what's going to come out of it is an invite to Mar-a-Lago or Washington, D.C. or to Moscow.

And this will be an ongoing dialogue between these two world leaders. I think the urgency at the moment of North Korea means that Trump has got to talk about that. But I just see it as much more friendly.

I think we are treating it a little bit as if it's a summit meeting when it's just a quick hello and stop the phone calls, and now we can look at each other eyeball to eyeball.

CABRERA: Yes, about that. The fact that they have at least three phone calls before this meeting. We heard both leaders talked about how good it is, though, to meet in person. Does that personal contact make much of a difference, Doug?

BRINKLEY: I think it does. I mean, I remember when Ronald Reagan was meeting with Gorbachev, Gorbachev was all bundled up and Reagan came out without a coat on trying to show, look, I don't need to bundle up. People were all going to be microlooking at the body language and looking for little clues.

But personal relationships matter. If Trump and Putin can develop one and come up with a scenario where we can solve the mess in Syria or work in collaboration with North Korea, it's a win for the United States.

But as been mentioned, the problem is Putin is very good at fooling American presidents. Remember when George W. Bush said he looked into Putin's eyes and saw his soul. We done want Donald Trump to buy the Putin bait, which is a kind of charm he has because of his power.

CABRERA: Meantime, Phil, earlier, President Trump, today, was tweeting this, and I quote, "Everyone at the G20 is talking about why John Podesta, from the Hillary Clinton campaign refused to give the DNC server to the FBI and CIA."

And then just moments ago, the top ranking Democrat on the Intelligence Committee, Congressman Adam Schiff responded, saying, quote, "Sure, that's the big talk at the G20, not climate change or trade, but why didn't John Podesta give a server that wasn't his to the CIA." Phil, your reaction?

MUDD: Well, I can't figure this out. Look, you go overseas and the conversations have to do with things like climate change, what's going on with Syria, what's happening with North Korea, American commitment to NATO, critical issues.

I can't believe anybody actually even knows what happened with the DNC server, much less its (inaudible) on it. The critical aspect here that I think is odd is the president has left the United States and he's airing American laundry overseas.

It's almost like if you go into a dinner party and you yell out my wife is fat. Everybody looks around the table and say who invited that guy. He's talking and disparaging terms about U.S. intelligence and U.S. assessments of what happened with the American election, about what happened with a server from the Democratic Party in an international setting overseas.

Everybody's got to be looking around and saying, what is this guy thinking? It's just odd, Ana. It's weird.

[11:15:06]CABRERA: Susan, what is your reaction to that? Is he trying to distract, deflect, or just caught up in his own world?

HENNESSEY: It's an incredibly strange thing. I don't think there is anyone who really believes that everybody is talking about that at the G20. It's also evidence that the president appears to continue to be confused.

John Podesta's e-mail hack was separate from the hack at the DNC server so that's what Congressman Schiff is referring to. John Podesta did not give the DNC servers to the FBI, not the CIA.

They weren't his to give in the first place. In continuing to muddy the waters on the stories of what happened during the 2016 election interference and it also sort of a strange thing to do, considering how much attention is being focused on whether or not President Trump is going to raise the issue of election interference during his meeting with President Putin.

Some early reports that sounds like he doesn't intend to. So the idea that at that same moment or shortly before, he would choose to once again raise these issues on his Twitter feed. It really just puts sort of the starkness and sort of bizarreness of his decision to not bring this up to President Putin in an even starker light.

CABRERA: All right, everyone, please stand by. We are awaiting the readout from the meeting between Russian Vladimir Putin and U.S. President Donald Trump, their first face-to-face in the sidelines of the G20 Summit.

They started meeting over an hour ago and a meeting was supposed to last just 30 minutes. We are still waiting to hear whether they are continuing to talk. We will have the highlights as soon as we hear that meeting is wrapped up.

We are also following other stories. There is another wrinkle to all of this. Disturbing new CNN reporting that Russia has ramped up spying on the U.S. Hear why and how the Trump administration is responding.

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[11:20:43]

CABRERA: The breaking news, President Trump and Russian President Vladimir Putin, finally face-to-face for the first time. Both leaders voicing optimism before starting their high stakes talk. Meantime, CNN has new information that Russia has intensified its spying efforts here in the U.S. since the election. I want to bring in CNN crime and justice producer, Shimon Prokupecz.

He is part of the team that broke this story alongside Pamela Brown and Evan Perez. Shimon, we know the Obama administration kicked out 35 Russian diplomats in December that was part of the response to the election hacking.

And now you're reporting there may be nearly 150 Russian operatives here in the U.S. How is that happening and why?

SHIMON PROKUPECZ, CNN CRIME AND JUSTICE PRODUCER: Well, that's right, Ana. So what we have learned is that the Russian spies are ramping up their intelligence gathering efforts in the U.S. according to current and former U.S. intelligence officials, who say they have noticed an increase since the election.

The Russians have not been slowed by retaliatory efforts after it meddled in the U.S. election according to the U.S. intelligence community. Officials say they have been replenishing their ranks since the U.S. expelled the 35 Russian diplomats who were suspected of spying last December.

In some cases, we are told these Russian spies that are believed to be here now have tried to gain employment at places with sensitive information. The FBI would not comment for the story and the Russian embassy didn't respond to a request for comment -- Ana.

CABRERA: So if U.S. intelligence knows this, what is being done about it? Why aren't they stopping it?

PROKUPECZ: Well, you know, there are several things going on. Certainly, the FBI is continuing to investigate some of this. But some of it has to do with after the 2016 where the Russians were accused of meddling both the Obama and the Trump administrations have been slow to take measures to respond to the intelligence threat, you know, according to the former U.S. officials we've talked to.

Also the way in which our political climate, the partisan political disagreements over the Russian activity and President Trump's reluctance to accept intelligence, conclusions about Russia's meddling in the election, has slowed efforts to counter the threat.

And there's this other issue that's been ongoing, which is the frustration with the State Department over the granting of visa's to people that U.S. intelligence suspect are intelligence officers.

The State Department would not comment on that for us. Also, as I mentioned, the FBI has a pretty robust and continuing counter intelligence investigation, which keeps an eye on some of this activity.

CABRERA: Shimon Prokupecz, lot to discuss, thank you very much. I want to bring back my panel now. First to you, Phil Mudd, I want to get your take, as a former intel guy, why now for this increase spy effort by the Russians and the U.S., do you think?

MUDD: Well, I wouldn't read too much into this and I wouldn't lose sleep over this either. This is a game, Ana. Let me tell how this game works. We throw out a bunch of spies.

Months later, the Russians come in with visa request. It say things like we need another computer technician at the embassy. What do the Americans supposed to say? They are going to issue that person a visa and find out later that guy is a spy.

The reason I'd say don't worry about this in addition to the fact that they are going to replace the people who were tossed. They are not out there, necessarily just to look at political secrets that surround President Trump.

You can find that stuff in Washington, D.C., every newspaper, magazine, and cable news show including CNN. They are out there chasing more dangerous stuff, and they've been doing that for years in particular as they ramped up.

I'm worried about defense secrets, science and technology. Not political secrets, but things like new technology for aircraft, for ships and submarines. That's the kind of stuff I'd worry about them stealing.

CABRERA: So you don't think they are going after trying to feel out the new administration. You think they are on to bigger fish, even?

MUDD: They are on to a couple things. I think they would be, for example, in particular, not just sort of gossip by the White House. I would be interested if I were them in debates in the Congress and in the White House about Russian sanctions.

Are there officials at the White House who are in favor of removing Russian sanctions, I'm sure their spies hunting that information. But the big fish are fish that either give the Russians an advantage in understanding American weapons systems or give the Russians a chance to steal stuff that helps them build their own weapons system.

Things like special sonar, new materials for aircraft and ships, new metals, that's the kind of stuff they want to steal, in addition to cyber stuff.

[11:25:08]CABRERA: Jill, I'm still so curious about the timing here. Russia knows their actions are under scrutiny here in the U.S. right now. So Jill, does it make sense to you that they would have an operation like this under way?

DOUGHERTY: Well, yes, because I think both things can happen at the same time. I mean, I totally agree with Phil, this isn't just kind of standard operating procedure. It's not good, but that's kind of the way the game is played.

I think, you know, for Putin, if you look at what he's trying to do in that room right now, I think he's trying to understand, you know, what makes Donald Trump tick. I'm sure that before this meeting, he has had a lot of information, psychological profiles, understanding of who Donald Trump is, what motivates him, how you can get to him and then make his pitch for the things he wants. This is Putin.

So what does he want? He wants the end of sanctions. He might find an interesting different way of approaching it, kind of making that case to Trump, which could say, look, this is completely unfair. It's not right. It's going to backfire.

This is my surmisal that I think this is probably what is going on. It's interesting, right before their meeting, Mr. Putin was talking about North Korea and he used the phrase that we have to make sure that we don't lose our self-control.

So these are all, you know, things that he can approach Trump in a different way and, again, as an experienced person, he's done this before. He can almost give advice. I could see him trying to, because he knows psychology, being a former KGB operative.

This is what he did for a living. He sits down across from the other guy, wants to recruit him and how do you recruit the other guy? Blandishments, praise, maybe sometimes a little mean, you know, whatever it takes, a lot of acting. So I think there's probably a lot of game playing going on.

CABRERA: On the flip side, Trump and those who know him have been known to have a strength as being somebody who is really good at those one-on-ones, a charm offensive, so to speak. Could that work on Putin?

DOUGHERTY: You know, that is true. However, President Trump is a lot more off the cuff, gut. Let's see how it's working right now. President Putin is very disciplined and very organized in the way he does his stuff. He goes in with a plan.

And you know, obviously, he can react to what happens at any given moment. I think he comes in much more prepared, even psychologically, for what he wants. Another point that would be interesting is, because it's a small number of people in that room, the readout, I think is going to be really crucial.

The Americans could say something. The Russians will say something. Will they be the same version of what happened? You know, could the Russians pinpoint something else? Could Americans say this happened and Russians say this happened?

Entirely possible that it will sound the same, but the tone could be slightly different because President Putin really wants to look like the experienced adult on the world stage. This is a delicate thing, but he wants to look like he is a person that the world should really trust.

He is the person with experience. He is the person who doesn't -- who believes in climate change. He's already started doing this. Don't do sanctions. Sanctions are unfair. He's already got to message across. He's said to the Europeans and others, I believe in climate change, even if he doesn't particularly believe in climate change. But he's saying that. So I think there's another game being played, which is, you know, look at me. I'm Vladimir Putin and I am also the leader of the world. You could argue.

CABRERA: He's definitely set that precedent of being a man in power. We keep hearing from all these analysts, just his expertise in the power play. We are getting some new tweets from John Podesta in our last segment as we were talking about this back and forth that's now unfolding between the president who is at the G20 and John Podesta, former Hillary Clinton campaign.

Here is what John Podesta writes, "On a cross country road trip with my wife, pulled in for a pit stop at E. Fairmont W West Virginia to see that our whack job president is tweeting about me at the G20."

These are his words, "Get a grip, man. The Russians committed a crime when they stole my e-mails to get you elected president. Maybe you might try to mention that to President Putin. By the way, I had nothing to do with the DNC." Susan, your reaction to this?

HENNESSEY: Well, I think the harsh words are somewhat merited particularly the sort of get a grip part and remember that sort of the Trump Putin meeting is not the only thing on the agenda at the G20. These are countries that are tackling --